Canada is not in for a recession this year 含羞草研究社渂ut a soft landing.含羞草研究社�

That含羞草研究社檚 the word from Pierre Cl茅roux, chief economist of the Business Development Bank of Canada, who served up his economic forecast at a Surrey Board of Trade luncheon at Northview Golf Course on Feb. 1.

含羞草研究社淕rowth is going to be below one per cent, so there含羞草研究社檚 not much growth especially if you look compared to 2021-22 this is quite modest growth but the economy will continue to grow anyway, especially the second part of 2024,含羞草研究社� Cl茅roux said. 含羞草研究社淪o the economy is going to be flat until interest rates start to decline but in the second part of the year you will see more momentum in the economy and in 2025 we will go back to a more balanced economy. Low inflation, lower interest rate and growth is going to become again, around two per cent.含羞草研究社�

Inflation is going down everywhere, he said, but there are still challenges. European countries will still under-perform this year, mostly because of the war in Ukraine, which is increasing the price of energy. 含羞草研究社淚t含羞草研究社檚 really disrupting supply chains, so Europe is going to have another difficult year in 2024.含羞草研究社�

North America, in contrast, 含羞草研究社渋s going to be the best region in the world. This is where we see the most growth in the world right now, it含羞草研究社檚 in North America.含羞草研究社�

The U.S. economy is doing better than Canada含羞草研究社檚, he noted. 含羞草研究社淲hat is different is the growth in the U.S. is much stronger than in Canada.含羞草研究社� The reason, Cl茅roux said, is the structure of mortgages 含羞草研究社渋s quite different in the U.S.含羞草研究社� Eighty per cent of Americans have 25-year mortgages. 含羞草研究社淚n Canada it含羞草研究社檚 the opposite 含羞草研究社� 80 per cent of Canadians have a mortgage for less than five years. So when you increase the interest rate, you don含羞草研究社檛 have the same impact on people. If people have a mortgage for 25 years, well they won含羞草研究社檛 see the difference at the end of the month even if interest rates are increasing. They might have a car loan and something else, but in Canada the hit is more because people renew their mortgage.含羞草研究社�

Two more reasons the U.S. is performing 含羞草研究社渕uch better含羞草研究社� than Canada, he said, is because the U.S. government is spending a lot of money, 含羞草研究社渨hich is helping the economy,含羞草研究社� and consumers south of the border have also been spending a lot of money. 含羞草研究社淐onsumption in the U.S. is very strong.含羞草研究社�

Cl茅roux expects the Bank of Canada will reduce interest rates in June, after increasing it for the past 18 months. And when interest rates decline, he said, consumption will increase 含羞草研究社渂ecause there含羞草研究社檚 money in the system.含羞草研究社�

含羞草研究社淥ur forecast for the B.C. economy is growth around 0.5 per cent,含羞草研究社� he said. 含羞草研究社淪o it含羞草研究社檚 modest growth, but not a recession. The economy is just slowing down. Like for Canada when interest rates start to decline in June, you will see more pick up in the economy. The first sector that is going to come back is the housing market. Retail is also going to improve and the manufacturing sector is going to follow; 2025 is going to be a much better year where growth is going to be close to two per cent.含羞草研究社�